South Korean financial regulator warns of risks from unknowingly enrolled revolving credit services

South Korea's Financial Supervisory Service (FSS) is urging credit card users to carefully verify their enrollment in 'revolving credit' services, also known as 'revolving,' due to a surge in complaints from consumers who were unaware they had signed up. These individuals found themselves burdened with excessive debt because they did not realize they were using the service.

Revolving credit allows cardholders to defer payment of a portion of their monthly bill to the next month. While it can provide temporary liquidity for those struggling to pay their full balance, the FSS warns that prolonged use can significantly increase the burden of principal and fees. Interest rates for revolving credit typically range from 15.1% to 18.3%, according to data from late May.

The FSS emphasized that enrollment in revolving credit is not a mandatory requirement when issuing a credit card. They strongly advise consumers to check their enrollment status through various channels, including card company call centers, monthly statements, and mobile applications. If there is no intention to use the service, it must be canceled promptly to avoid accumulating high interest charges and potential negative impacts on credit ratings.

In addition to the revolving credit warning, the FSS also advised caution regarding disputes arising from overseas credit card usage. They noted that refunds or compensation processes for issues like non-receipt of goods, card theft, or double billing can take several months, as the final decision rests with international card brands like Visa and Mastercard, not the domestic card issuers. To mitigate risks associated with overseas transactions, the FSS recommends utilizing services such as 'overseas use safety settings,' which allow users to restrict card usage by country, duration, or amount, and 'payment notification' services that provide real-time alerts for transactions.